Hamilton’s Financial Plan

Hamilton’s Financial Plan

1.       Goals

a.       To make the United States a Industry-based country

b.      To Restore U.S. credit

c.       To give the federal government more economic power

d.      To please the rich

2.       Parts

a.       Report on Public Debt

                                                               i.      Pay off U.S. debt to foreign countries by war bonds.

                                                             ii.      The bonds were bought by the rich and were paid 4% interest annually.

                                                            iii.      Some Americans did not want to pay off debt since they had won the war.

b.      Assumption of State Debt

                                                               i.      Pay off the states debts with federal funds

                                                             ii.      The states that had already paid off the war debts were not happy

1.       They were mostly in the South

                                                            iii.      So Hamilton agreed to move the capitol to Virginia for the plan to pass.

c.       The National Bank

                                                               i.      A place to store federal income revenue

                                                             ii.      Would give loans to merchants to start businesses.

                                                            iii.      Control state bank policies

d.      Income of the new country a.k.a taxes

                                                               i.      Exercise tax on the whiskey (poor western farmers)

                                                             ii.      High tariffs on foreign goods

3.       Opposition

a.       Jefferson

                                                               i.      Jefferson was opposed to the national bank because he thought it would give the federal government too much power

b.      Western farmers

                                                               i.      The poor farmers could only afford and make whiskey. They did not want a tax on whiskey

c.        Democratic Republicans

                                                               i.      Opposed to having such a strong national government.

4.       Supporters

a.       The rich mercantile class

                                                               i.      The National Bank would give them loans to start new businesses

b.      The elite class

                                                               i.      War bonds would be a good source of income

c.       The federalist party

                                                               i.      The party would gain more power and will have a stronger national government.

5.       Results

a.       The capitol moved to the South in Virginia

b.      A national bank was created giving more economic power to the national government

c.       The Whiskey rebellion

                                                               i.      The poor western farmers rebelled against the government. Washington and Hamilton rode out with army to put down rebellion

1.       The people cannot just rebel violently if they don’t like what’s happening. They have to go through normal federal procedures.

d.      Lead to the industrial revolution